Low-income households

A new fund to help deprived people in the European Union has been proposed by the European Commission. The fund would support schemes in member states providing food to the most deprived people, and clothing and other essential goods (such as shoes, soap and shampoo) to homeless people and materially deprived children.

The Commission envisages a budget of €2.5 billion (about £2 billion) for the fund over the period 2014–2020. Member states would be responsible for paying 15 per cent of the costs of their national programmes, with the remaining 85 per cent coming from the fund.

The proposal now goes to the European Parliament and the European Union's Council of Ministers for approval.

As many as 24,000 families in Scotland face severe disadvantage – amounting to 4 per cent of the total population of families with children – according to a think-tank report.

The Demos report emphasises that hardship is about much more than just low income. The report defines severe disadvantage as having four or more disadvantages out of the following seven: low income, worklessness, lack of qualifications, poor physical health, mental illness, overcrowded living conditions, and a poor-quality neighbourhood.

Living standards for low- and middle-income (LMI) households are predicted to be lower in 2020 than a decade earlier even if the economy recovers, according to a new analysis.

The study, prepared for the Resolution Foundation think-tank, looks at the changing structure of the jobs market in tandem with the effects of the tax and benefit system, and models the prospects for different households. It assumes the economy recovers steadily from the recession, and then grows at 2.5 per cent each year from 2015.

The government's proposed new universal credit scheme is 'heading for trouble', says a think-tank report. The scheme risks undermining its own goals by taking a 'sink or swim' approach to the challenge of benefits reform, and will leave many households struggling to cope.

The report is based on in-depth interviews and discussion groups with low-income households with children, focusing on budgeting and financial resilience.

The government's decision to change the way benefits and tax credits keep up with rising prices will cost the typical family with children £614 a year, says a think-tank analysis.

In the 2010 Budget the Chancellor announced that from April 2011 the uprating of benefits, tax credits and public service pensions would be based on the consumer prices index (CPI) rather than the retail prices index (RPI) - typically producing a lower figure. The think-tank report looks at what this change will mean for family budgets in the five years after the introduction of the new universal credit.

100,000 of the poorest working families will be hit hardest by arrangements for childcare costs under the new universal credit, a leading charity has warned. Under universal credit, due to be introduced from 2013 onwards, families will lose the contribution to childcare costs currently available through housing benefit and (potentially) council tax benefit. As a result, help with childcare costs will be limited to 70 per cent instead of up to 96 per cent now.

People on the lowest earnings stand to lose two-thirds of the intended increase to their untaxed income when universal credit and the personal tax allowance start to interact, according to campaigners.

The charity Gingerbread commissioned research into the impact of universal credit on working single parents once it is introduced in October 2013.

Politicians must ‘grasp the nettle’ of tax reform, according to a think-tank report. The existing system of redistribution through tax and benefits is inefficient, and needs to be replaced by one that provides ‘redistribution at lower cost’.

The report draws on findings from the Mirrlees review (2011) and the Commission on Living Standards (2011). It sets out structural reforms designed to improve support for households on low-to-middle incomes. Simply making the existing system more generous to this group will not be sustainable in the long run, it argues.

Many of society’s most vulnerable people have been left in a ‘fragile’ state by the economic downturn and cuts to public services and benefits, according to a new study.

Researchers examined the lives of around 100 vulnerable people living in one north London borough. They used focus groups, face-to-face interviews and ethnographic studies in which researchers shadowed residents for a day. They focused on three groups: disabled residents and carers, young people, and families on low incomes.

Tax credits have not had the effect of forcing down wages for low-paid workers, according to a think-tank report. Overall, tax credits have had a number of successes and are popular with those who get them. But the new universal benefit system, coming in from 2013, means the purpose of tax credits needs rethinking.

The report looks at the direct and indirect impacts of tax credits introduced under the previous Labour government.

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PSE:UK is a major collaboration between the University of Bristol, Heriot-Watt University, The Open University, Queen's University Belfast, University of Glasgow and the University of York working with the National Centre for Social Research and the Northern Ireland Statistics and Research Agency. ESRC Grant RES-060-25-0052.